China’s coking coal futures main contract 2509 hit a near 9-year low in the night session on May 23, while the coking coal futures main contract 2509 also reached a nearly 8-year low. Industry insiders noted that the recent record lows in both coking coal and coke prices are primarily due to issues in their own supply and demand fundamentals.
According to a report from Huaxia Times on May 24, the prices of coking coal and coke futures in China have been consistently declining. In the night session on May 23, the main contract of coking coal futures 2509 opened lower and continued to fall, dropping to as low as 800 yuan (RMB) per ton at one point, marking a near 9-year low, while the main contract of coke futures 2509 also dipped to 1376 yuan per ton, reaching a near 8-year low.
Since the beginning of this year, the main contract of coking coal 2509 has fallen by 35.25%, and the main contract of coke 2509 has dropped by 26.84%. Wei Yaru, an analyst from Haitong Futures, told Huaxia Times that the prices of coking coal and coke have been on a downward trend since the fourth quarter of 2023. The overall macro environment weakened, leading to a downturn in the real estate sector, which in turn affected the continuous decline of black commodity varieties.
Compared to coke futures prices, coking coal futures have shown a weaker trend. The black team at Everbright Futures explained to Huaxia Times that coking coal prices have dropped even more significantly due to continuous loose supply. Import volumes remain high, and coal production in China continues to increase. According to data from the National Bureau of Statistics of China, China’s raw coal output has been growing consistently. In 2024, the output of raw coal from large-scale coal enterprises reached 4.76 billion tons, an increase of 2.1% year-on-year. In the past 5 years, the output of raw coal has hit new highs every year. The significant increase in supply has put pressure on coal prices.
Zhou Minbo, the chief analyst of the black commodities division at GF Futures, stated to the media, “The recent record lows in coking coal and coke prices are primarily due to issues in their own supply and demand fundamentals. Since the Chinese New Year, the coal mining operation rate has rapidly increased, significantly higher than the same period last year. According to the National Bureau of Statistics, from January to April, the output of raw coal for industrial enterprises above a designated size reached 1.58 billion tons, a year-on-year increase of 6.6%, and the production of coking coal and clean coal also rose simultaneously.”
While production is increasing, demand is declining. Analyst Wei Yaru from Haitong Futures mentioned, “In terms of demand, the number of blast furnace maintenance in steel mills is gradually increasing, and molten iron has begun to peak and decline. The real estate sector continues to drag down steel demand.”
Wei Yaru revealed that with the continuous fall in coking coal and coke futures, some coal mines are already operating at a loss. Additionally, if the supply, imports, and inventories of coking coal remain high and difficult to alleviate, there is still room for coking coal prices to drop.